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The two answers that make the most sense are that rumors of the ECB buying Italian debt started and both Spanish and Italian bonds bounced hard off the lows to finish stronger (significantly stronger in the case of Spain). For now I will take late Friday trading with a grain of salt, though figured sooner or later the ECB would look at buying or at least the rumors that they were buying would start. Let’s see how those look on Monday afternoon, when it is harder to manipulate the price.

The other story driving stocks is that today’s weak home sales number virtually ensures a mortgage based QE3.

Maybe I am missing the stories where something fundamentally good has happened, it is possible those stories are out there, but once again, it looks like we are being led by central bank purchases and the promises of central bank purchases.

I find it hard to believe we rip a lot higher here, but so far today, the buy the dip crowd is gaining back some ground, but it feels stretched and hopeful, and with so many data points across the globe signaling weakness, we may not finish at the highs, or even positively. Though I suspect a lot of people will be off the desk this afternoon.